How can you apply supermarketing psychotactics to your ecommerce experience?

Loss leaders

Loss-leaders (popular, non-clearance items offered below cost in order to bring in foot traffic) can be profitable for brick-and-mortar stores, but not so much online. Loss leaders work in physical shops because shoppers tend to buy whatever else they need while in-store during that visit. It’s not the same online, where picking up extra items requires searching and browsing the website.

Amazon can afford to sell below cost because it turns over inventory well before it must pay suppliers. This “negative operating cycle” allows Amazon to make a return on cash flow. Most online retailers don’t run this business model.

The goal of loss leaders is to increase checkout total. Realistically, most online sellers will not succeed with product loss-leaders, rather with free shipping offers above a certain dollar amount. With 90% of consumers believing free shipping offers would entice them to spend more online, it’s no wonder so many e-tailers offer free shipping above $X year-round as a perpetual loss-leader (occasionally lowering the threshold during promotional periods).

Endcaps

Grocery aisle endcaps are premium space, and typically feature high margin products or brands that pay for this primo real-estate.

We read and view Web pages the opposite, left to right. While moving calls to action to the left of a page has paid off for some e-tailers, merchandising “endcap” content (including cross-sells and upsells) to the right of home, category and search pages may work on the same principle as grocery store navigation (it’s worth a test!)

Could eyes glaze over in long, uninterrupted search and category results pages? You bet.

Take a page from Wal-Mart and other big-box retailers: Create stopping points in the middle of long aisles, such as signs or displays that create a visual break. Dyches likes how clothing chain Anthropologie often repeats a design behind wall displays and then changes or ends the pattern to try to get customers to stop at a special display.

Online this can be accomplished by creating “breaks” in the design. Burton’s 13 Things feature does this crazy well, dropping humorous and lifestyle images into the experience.

During sales periods, show what’s selling out to create social urgency. Flash-sale sites like HauteLook and BeyondTheRack do this well.

One way to promote this is through real-time email that continually updates what’s sold out.

Class it up

To compete with Walmarts and other discounters, groceries “class it up” by bringing in “butchers who are skilled with the knife” or in-store seminars and events, like Whole Foods’ gluten free tours and kids craft days.

To compete with the Amazons of the ‘Web and other discounters, online retailers are becoming more like publishers, peppering content and other value-adds throughout the Web and mobile experience. Live “ask an expert” tools, product knowledge/shopping tools, and visual search.

Ten for ten

While any non-grocery retailer can do the X for $X promotion (and many do), the idea here is to leverage pricing psychology. Round numbers can affect how consumers perceive cost and value.

For example, “when something costs $100, consumers tend to rely on their feelings, whereas when something has an irregular price—such as $98.67—consumers have to use reason to compute whether it’s a good price.”

If ten-for-ten feels good, customers will like it. So experiment with 2 for $20, $3 for 50, etc. And remember, when customers are working towards reaching a free shipping or loyalty points threshold, there’s incentive to spend more than what’s rational!

Milk in the back

While it’s erroneously believed that grocery stores put the milk, cheese and eggs in the back so you have to walk through the store to get to them, that’s just a convenient side effect of the real reason. Dairy trucks load through the back of the store and milk needs to be refrigerated right away, thus the cases are in the back to be filled as quickly as possible.

Nevertheless, “best stuff in the back” became standard retail practice, even for stores like Staples. It wasn’t until Staples’ new (at the time) CMO Shira Goodman developed its “that was easy” positioning did the most popular items get moved to the front of the store.

While sales did drop a little due to less impulse buying, it strengthened the brand, and helped Staples successfully differentiate against competitors.

Moral of the story? Borrowing design conventions from other industries is not always the right move.

Online also has an advantage of tailoring the “front of the store” to the customer. Smart use of personalization means what’s “in the back” for one customer can be “in the front” for another. Take advantage.

Impulse aisle

But online impulse shopping has a benefit – you can A/B test and personalize the heck out of it.

Loyalty cards

We all know why supermarkets have loyalty cards — data, data, data to optimize their merchandising and send you targeted offers.

For cross-channel retailers, loyalty cards are all the more valuable for personalization. Whether a physical card or simply tied to an email address, understanding online and offline behavior helps better target the online experience. And with emerging in-store digital like iBeacon, customers can do even more with their loyalty account, such as receive targeted offers by mobile, check account balances in-store, etc.

Tight checkout

We complain about abandoned carts and half-finished checkouts, but supermarket shoppers commonly ditch stuff in the checkout line. That’s why checkout lines have been designed narrower and narrower with less space to dump items!

That’s the same idea behind enclosed checkouts and not providing cart summaries during the checkout process.

Wikipedia defines customer experience simply as “the sum of all experiences a customer has with a supplier of goods and/or services, over the duration of their relationship with that supplier.” In an ecommerce / omnichannel context, customer experience spans every brand, sales and marketing touchpoint across digital and physical, pre to post-purchase.

Why was customer experience (CX) ranked as “most exciting”?

CX as a differentiator

78% of respondents agree or strongly agree that customer experience is about differentiation. In the age of Amazon, retailer’s can’t compete on price, selection, discounts or free shipping offers. There has to be more to the experience.

If customer experience boils down to being ‘easy, fun, valuable and/or pleasurable to shop’ with a company, the goal of customer experience as a marketing objective is ultimately to be more easy, fun, valuable or pleasurable to shop with than the competition.

CX fantasy vs. reality

“While organizations are aware of the opportunities afforded by a customer-focused approach, not all of them are able to capitalize on this, as CX is one of the areas where the anticipated opportunity was outstripped by reality in 2014.”

The problem facing many companies is not lack of cross-touchpoint strategies and tactics, rather it’s the lack of data integration, technological infrastructure and process that holds CX back.

It’s interesting to note, marketers overwhelmingly believe ‘understanding the customer journey across channels and delivering a great experience across touchpoints’ is very important, yet only 12% consider joining up online and offline data a top-3 priority.

Without integrated data, marketers cannot effectively understand the customer journey across channels. Decisions will be made on “gut-feel,” and actions will be “spray and pray.” Sales won’t receive proper attribution. Strategies and tactics can’t be properly measured.

In the same study, the same marketers ranked targeting and personalization top priority for the coming year — essential for customer experience. But personalization requires context, and context is gleaned from data. When data lives in silos, the experience can only be personalized in the context of interaction within the channel.

While consistency of messaging across channels is somewhat under a marketer’s control, without a complete understanding of cross-channel response the marketer risks irrelevant targeting. Did the customer add to cart online but ultimately purchase in-store? Are you still remarketing to her? Did she buy online but return in-store? Are you still recommending accessories to her online?

We know many customers use mobile to research and discover products, only to convert in offline or Web channels. Without integrated data, marketers only understand a piece of the journey. So why do marketers seem to overlook the importance of data integration?

Marketers know the value of data, but won’t prioritize data-driven customer experience if it’s perceived as too difficult to get social, mobile, CRM, personalization tools, offline data, beacons, Web analytics, etc to play nicely with each other. Without integrated data sources and systems, marketers’ CX strategies will be constrained to channel-centric experiences, based off channel-centric context.

And that’s what’s wrong with customer experience strategy.

]]>http://www.getelastic.com/whats-wrong-with-customer-experience-strategy/feed/0The Head to Toe View of the Customerhttp://www.getelastic.com/the-head-to-toe-view-of-the-customer/ http://www.getelastic.com/the-head-to-toe-view-of-the-customer/#commentsThu, 22 Jan 2015 08:04:00 +0000http://www.getelastic.com/?p=22866We know about the 360-degree view of the customer: a unified account of interactions across digital and physical touchpoints. Omnichannel Nirvana. But when it comes to in-store analytics, the head-to-toe view of the customer may be what’s next in one-to-one marketing. How are retailers using face and foot recognition to optimize operations? And how does this tie back into digital?

The ‘thousand foot’ view of the customer

A 29-year old Master’s student at University College London believes assumptions about gender and demographic segments can be made based on customers’ footwear, and has received seed funding to develop his idea. Hoxton Analytics’ system involves hardware (foot-level cameras at store entrance) and software that uses computer vision, machine learning and neural networks, gait analysis and depth detection. The algorithm can assess a customer’s gender and direction they are moving.

Store management and marketers can use this data to make decisions on merchandising, inventory management, customer service and promotions, and answer questions like:

What percentage of our customers are male or female? Does this vary by location or time of day?Does percentage of male/female change sea or during certain promotions?What are customers’ most likely income cohorts?Which customer cohorts are buying what attracted to which displays?Which stores are underperforming and what could be changed to improve sales?Why is store A performing worse/better than stores B and C?How are sales affected by nearby competitors’ sales events?Do shoppers spend more or less time in-store when foot traffic is high vs. low?Do shoppers spend more or less money when foot traffic is high vs. low?How does the number of available floor staff affect footfall and sales? Is there a positive or negative correlation?

While Hoxton places cameras at the front of a store, other solutions that use heat or video sensors can track movement throughout the store and determine:

How do customers navigate through the store? What are the most common paths?What is checkout-line abandonment rate during sale events and when footfall is above average or unusually high?Which displays and departments have the most throughput and longest dwell times?Which stores could benefit from different merchandising strategies and layouts?A/B testing: place product in 2 different locations and track dwell time in each location – where is it best noticed?How does consumer behavior differ when shopping alone vs. with other?

Ideally, a merchant could combine both technologies to track demographic segments through the store via sensors placed throughout the store.

While this data is most useful for store merchandising and management, digital marketers benefit from an understanding of the differences in in-store behavior and online. For example, understanding the geographic market differences can help better target merchandising, offers and email campaigns. More footfall directly to the sale rack in Market A? More attention to new stock in Market B?

Though beacons can gather similar data, they’re limited to the segment that opts in. Beacon data is great for personalizing an individual’s experience. Footfall tracking is better for optimizing the overall experience.

Facial features

FaceFirst lets you upload photos of known shoplifters and problem customers and even litigious customers, with the ability to send alerts to floor staff when such individuals enter the store (and conversely, alerts when your best customers arrive).

NEC’s facial recognition product NeoFace claims to be able to identify returning customers even when facial hair, glasses or expressions change, keeping tabs on how frequently these shoppers visit a store and across locations.

Theoretically, a combination of these 2 technologies would allow a retailer to also flag “problem customers” that shoplift, return a large percentage of merchandise (or who frequently showroom).

To go even further, imagine apps and beacons communicating with facial recognition technology to apply real-time sentiment feedback to in-store personalization through SapientNitro’s beacon-enabled displays, iWatch or other wearable. Mary’s examining product A, but looks confused? Display additional product information. Mary has one item in each hand? Show review content. Mary’s delighted as she handles a product? Show cross-sells and special offers.

This contextual data can be rolled back into the online/mobile experience, remarketing, social or email targeting. Did Mary buy the product she researched online? Add a burn pixel to your remarketing campaigns. Did Mary spend a lot of time in Department Z? Merchandise her online experience accordingly.

While the above use cases are all hypothetical, the technology is converging to make it possible.

The privacy pitfall

The technology for gathering a head-to-toe view of the customer is here (or rapidly approaching), but consumer backlash over privacy is a real concern. Just ask Tesco.

While facial recognition is in-your-face, footfall analytics vendors suggest their more anonymous approach is a step closer to privacy.

A retailer will need to determine its own degree of opt-in and transparency about foot or facial tracking and weigh that against the risk of backlash. Even with permission and adherence to any legislated privacy guidelines, marketers will also need to carefully consider execution. Consumers have low tolerance for both ‘creepy’ and ‘annoying.’

The technology gap

While marketing can dream it, it’s IT’s job to make it work. The challenge for most retailers won’t be data collection, but data connection. Most businesses rely on multiple and disparate systems of record that make it extremely difficult to orchestrate the consistent experiences necessary to make these initiatives happen. That’s why one of the most critical requirements for retailers will be to invest in commerce integration technologies such as unified APIs that make it possible to bring together customer and enterprise data sources in real-time so that they can be used in unison to inform and drive your marketing tools.

]]>http://www.getelastic.com/the-head-to-toe-view-of-the-customer/feed/03 Beacon Trends to Watch in 2015http://www.getelastic.com/3-beacon-trends-to-watch-in-2015/ http://www.getelastic.com/3-beacon-trends-to-watch-in-2015/#commentsMon, 19 Jan 2015 08:05:07 +0000http://www.getelastic.com/?p=22820Mobile is not just another access point for your online business, it’s an in-store shopping aid. According to SapientNitro, 53% of consumers prefer shopping in-store vs other channels. 81% of these shoppers want to interact with their phones in-store, and 61% want to use “any device” (PC, smartphone or tablet) to help them shop. And beacons are one of the ways to play in the phygital age of retail.

Most retail beacon implementations require the shopper to interact with an app, sending content and offers to a device when a shopper hits a certain location or dwells near a certain product.

Passive beacons tap directly into phones, whether in hand, pocket or purse, and use location information and past behaviors to personalize content on nearby display screens. The shopper doesn’t need to engage their device at all — an innovation introduced by SapientNitro at the NRF Big Show last week.

Requested Beacons

An example of requested beaconing is GameStop’s Shelfbucks pilot, which places beacons front-and-center with a prominent call-to-interact (as opposed to out-of-sight active and passive beacons).

The beacons serve as an access point to additional information, relevant to the product in question (with less friction than QR codes or looking up reviews on a mobile app). Requested beacons also have the ability to tap into user’s context to personalize content and recommendations, while collecting relevant data to add to the 360-degree view of the customer.

GetElastic contributor Kevin Lindsay recounts his holiday shopping experience with GameStop’s beacons, commenting that the technology was ‘seamless, well constructed, and designed to self-improve the more I engaged… (it) made me want to keep browsing, reading, and playing around with their app.’

iWatch Beacons

iWatch won’t hit the shelves till Spring, but supermarket chain Marsh is wasting no time, setting up iWatch-ready beacons. in all of its 75 locations. Marsh’s mobile app already boasts 33 million active users; iWatch users can receive offers and recipes, for example, or tap into shopping lists created in the app with a hands-free experience.

Conde Nast and WebMD are rumored to also be rolling out iBeacon-iWatch projects. Will more brands and retailers follow? We’ll be “watching.”

The term means what you think, phygital marketing spans the digital and physical world. Consumers are armed with the Web-in-their-pocket and are actively researching, showrooming and discovering brands and products through social and mobile search. This week’s infographic by DisplayData highlights consumer beliefs about retailers phygital expectations (via SmartInsights).

42% of US and 46% of UK consumers think retailers offer different prices online and offline Tweet this

47% of US and 48% of UK consumers think retailers don’t offer the same promotions in-store as they do online Tweet this

52% of US and 28% of UK consumers believe stock availability in-store is an issue compared to online shopping Tweet this

26% of US consumers and 21% of UK consumers think retail staff are poorly informed Tweet this

Because we like to have phun at Elastic Path, this week’s inphographic Phriday includes a bonus graphic, courtesy of our own David Chiu.

]]>http://www.getelastic.com/how-retailers-can-meet-omnichannel-expectations-infographic/feed/0Omnichannel vs Multichannel and the Store of the Futurehttp://www.getelastic.com/omnichannel-vs-multichannel-and-the-store-of-the-future/ http://www.getelastic.com/omnichannel-vs-multichannel-and-the-store-of-the-future/#commentsWed, 03 Dec 2014 08:03:40 +0000http://www.getelastic.com/?p=22606You can’t attend an ecommerce conference without one or ten sessions on “omnichannel” on the agenda. Like big data, it’s a buzzword that leaves many mystified, and a complex business issue that takes strategy and technology to do right.

As we approach 2015, how much “omnichannel” integration is table stakes to deliver a consistent customer experience, and what does it take to make it fly?

Multichannel vs Omnichannel

In the early days of ecommerce, traditional brick-and-mortar and catalog retailers added transactional websites, becoming “multichannel” retailers. For many, the online “channel” functioned as its own entity with its own systems, even with its own P&L competing against the retail division. Some even outsourced ecommerce – notably Target and Borders, who let Amazon run their online stores for years before taking control in-house. Regardless of the model, online and in-store customer experiences were completely separate.

In recent years, the “multichannel” concept has morphed into “omnichannel,” these buzzwords often used interchangeably – but they’re not exactly the same concept. If you want to get etymological, multi means “more than two” and omni means “every.” You can operate in as many “channels” as you want, but you’re not an omnichannel business unless there is an interconnectedness between every touchpoint from the perspective of the consumer.

Omnichannel isn’t about pushing in-store customers to buy more online. There’s a myth of the uber-profitable “multichannel customer” that splurges wherever you accept a credit card. It is about supporting the customer’s shopping needs and preferences, with the online channel as much of a customer service tool as it is an option to purchase from.

According to this year’s Insights 2014 report by SapientNitro, 53% of consumers prefer shopping in-store vs other channels. 81% of these shoppers want to interact with their phones in-store, and 61% want to use “any device” (PC, smartphone or tablet) to help them shop.

Accenture found 73% of North American consumers have showroomed at least once in the last 6 months, and 49% think integrating stores with online and mobile touchpoints is where retailers need to improve the shopping experience most.

Today, having a website with transactional capabilities isn’t an option for retailers – it’s an expectation. And having a mobile-friendly site is now table-stakes too, not just as a complementary touchpoint to the ecommerce site, but as an in-store shopping aid.

The omnichannel expectation

Customers want to be able to pull up product information quickly and easily on their smartphones. They want endless-aisle capabilities to locate sold-out products in nearby stores or online. They want to reserve and collect, build wishlists on the Web and use wayfinding tools in-store. They want access to digital loyalty program information. Soon they’ll want to pay by phone in-store.

The Accenture study reports:

88% of consumers would use mobile tools to gather loyalty points or take advantage of real-time promotions in-store

82% would use endless-aisle features like ordering out-of-stock items for in-store or home delivery

79% would use wayfinding tools to locate shopping list items

77% would scan products as they’re added to a physical cart

74% would access other customers’ ratings and reviews

63% would be receptive to cross-sell/upsells based on scanned items in physical cart

45% of shoppers want accounts that are “completely connected between purchases and loyalty points both online and in-store”

61% would pay by phone at checkout

While there’s a big difference between what people say they would use if offered vs. what they demand, customers don’t know what they really expect until they feel the pain of an experience gap. When the website promised local stock availability, but was wrong. When the sale price online is not honored in-store. When the customer forgets to print out an emailed coupon. When the sales associates are all busy and you have a question about a product, and 15 minutes left on your lunch break.

As Intel’s Darin Archer points out (detailing his own recent, less-than-stellar “omnichannel” experience) the customer doesn’t think in terms of channels. When that zero-moment-of-truth hits, if your digital content and tools don’t deliver to support that in-store experience, the customer feels the pain.

However, despite the efforts to bring digital in-store, most are point solutions that aren’t integrated with the ecommerce system. Of the retailers in SapientNitro’s study, the majority offered Web wishlists, but only 12 synced lists across mobile devices. Target was the only retailer to sync shopping lists across multiple devices, supports in-store retrieval (and printing) through digital kiosks, and offers in-store mobile wayfinding tools to guide customers to where shopping list contents are located on the floor.

Closing the omnichannel experience gap

What distinguishes the omnichannel customer experience from the multichannel customer experience is the true integration between channels on the back end. This shift requires an urgent rethink of the digital tools marketers use:

How will you reimagine the shopping experience through digital experiences that bring a brand and product to life?

How will you provide new engaging, content-rich experiences are much more personalized for the shopper?

How will you adapt for the mobile users who consume rich content almost anywhere?

What tools are you using to manage and approve finalized (marketing-ready) product information and content that can be syndicated to channel partners (such as online resellers) and used internally?

Do you have a consistent library for product specifications, images, prices and other supporting information?

Do you have a single view of your customer across all your channels?

Are you able to support in-store pickup processes and ship-from-store options that help “save the sale”?

While it is unlikely anytime soon retailers will be able to standardize on one purchase system, each system can have their order history exposed as an aggregation service that can be accessed by the customer support applications the call center reps use, store associates log into, and the mobile app. This would make it so that across any touch point, all orders, regardless of channel would be visible.

Customer Service Call Centers

Many retailers have their online and physical store businesses divided across different executives that own separate operations by channel. With this comes different call centers that use different tools to get their job done. If you can’t consolidate these operations or tools, then minimally make sure that the tools have access to a customer’s order history across channels and have return/exchange processes outlined such that the handoff is smooth or preferably enables the first responder to resolve the problem.

In-store System

Store associates that have to support customers walking in and on the phone, need to have complete visibility into all purchases regardless of channel, and better yet, they should be able to see the customer’s loyalty value so that they maximize the experience for those customers that we all know can be the larger percentage of our revenue.

To truly achieve omnichannel Nirvana, these services and sources of data need to be connected across transactional touchpoints — they can’t operate as point solutions.

The store of the future requires Platform-as-a-Store

eBusiness leaders who seek to rapidly deploy new digital store capabilities will require the agility to swap out modular components to create a retail store “ecosystem of value.” In order to achieve this state, the store must act as a platform, connecting functionality together with a common set of data.

Silverman likens the emergence of the digital store platform to the growth of ecommerce as a point solution to a commerce suite. Getting to “platform-as-a-store” requires ebusiness and IT teams to establish an API framework that can connect the various technologies with the centralized commerce system, which he predicts will “act as the hub for the store platform.”

Retailers will realize greater value by connecting enterprise and point systems together to enable the digital store to operate in real time. For instance, in the case of task management, omnichannel store fulfillment orders that require pick and pack tasks will now be inserted into modern task management tools, allowing associates to perform omnichannel tasks side by side with traditional store tasks such as restocking shelves. The linkage between systems can also enable highly personalized experiences by integrating into customer relationship management (CRM) systems and content management systems (CMSes).

How Elastic Path enables the Retail Store of the Future

Elastic Path provides enterprise-wide access to commerce functionality and data via our universal API framework. In addition to powering web and mobile experiences, our catalog, merchandising, personalization, subscription and order services are also used to augment other retail applications, including point of sale, beacon, and omnichannel fulfillment systems. With our deep focus on integration and a consistent customer experience, Elastic Path is the only commerce solution specifically designed to be the hub for tomorrow’s retail ecosystems.

]]>http://www.getelastic.com/omnichannel-vs-multichannel-and-the-store-of-the-future/feed/0Why Consumers Showroom and Webroom [Infographics]http://www.getelastic.com/showrooming-webrooming-infographics/ http://www.getelastic.com/showrooming-webrooming-infographics/#commentsFri, 21 Nov 2014 08:06:53 +0000http://www.getelastic.com/?p=22054Last post we looked at the showrooming threat and what you can do about it. This week’s infographics cover both showrooming and webrooming, from WisePricer and Merchant Warehouse.

Tweetables

Over 50% of smartphone owners have researched prices while in store Tweet this

1 in 5 consumers practice showrooming, 96% plan on doing so in the future Tweet this

The top reason consumers showroom is ecommerce merchants offer free shipping Tweet this

42% of “webroomers” want to check in-store availability online before visiting a store Tweet this

23% of “webroomers” research online and purchase offline because they’re unwilling to pay for shipping Tweet this

Nearly 80% of local searches on mobile devices turn into purchases Tweet this

3/5 consumers believe they know more about pricing, discounts and product info than store associates Tweet this

]]>http://www.getelastic.com/showrooming-webrooming-infographics/feed/0The Showrooming Threat: 5 Ways to Fight Backhttp://www.getelastic.com/showrooming/ http://www.getelastic.com/showrooming/#commentsWed, 19 Nov 2014 08:04:35 +0000http://www.getelastic.com/?p=22129With 71% of US mobile users owning smartphones, hundreds of thousands of consumers are carrying the Internet in their pockets, and 81% of them use their devices in-store.

While some retailers are exploring iBeacon and other in-store digital goodness, most physical retailers are concerned about the threat of showrooming — when customers visit the physical store with the intent to order online (which increasingly involves a mobile touch).

The threat of showrooming

Consumers showroom in hopes of finding a lower price online, and of course, when it comes to low prices, the road often leads to Amazon.

Considering 50% of male and 42% of female consumers who showroom are members of Amazon Prime, the value prop of “spend a little more here because you don’t want to wait for shipping” isn’t enough.

No retail store wants to keep the lights on to make shopping on Amazon an even more delightful experience. And it’s not just consumer electronics retailers that have to fear. Forrester Research found sporting goods, specialty apparel, luxury department stores and child-and-baby categories were even more likely to be showroomed, with booksellers, department stores, gifts and office supplies on par with consumer electronics.

But it’s not all doom-and-gloom, Forrester reports 49% of customers that price check in-store report they ultimately do purchase in-store or from the store’s website, while 41% purchase from a competitor.

You can be on both sides of this phenomenon. Your own store visitors may buy from you, or you may benefit from other stores’ showroomers. How can you ensure you save (and steal) showrooming sales?

Price match is not the answer

Considering 67% of showroomers will buy from a physical store over Amazon when the store matches Amazon’s price with a rebate, price matching programs like Best Buy’s are a great idea, right?

Best Buy declared it’s killed showrooming for good with its price-match policy. (Best Buy is one of the top 3 retailers that Amazon’s male customers use to showroom). Unfortunately, any retail store trying to compete with Amazon on price is looking at taking a loss that, if successful, actually costs the business.

Here’s a secret – Amazon can afford to sell below cost because its quicker-than-retail inventory turnover generates cash well before its credit period is up. Amazon makes money investing customer cash while other retailers pay interest on money they need to borrow to pay suppliers.

Keep in mind, price matching can get convoluted – is the item a refurb? Is it being sold second-hand through the Amazon Marketplace that’s not actually stocked and sold by Amazon? Is it an older model? Denying price matches for any of these reasons may tick off customers and ultimately hurt your brand. Customers are not always as understanding of these nuances, to them a product and a price are what they are.

If not price matching, then what?

Support in-store and online purchases from your store

A certain percentage of showroomers intend to buy from your business. They’re looking for product information like customer reviews and leveraging your site to find products you don’t have on the shelf, or prefer to have shipped to their homes. Support this behavior with a mobile-friendly website or app, barcode scanning or iBeacon content, wayfinding tools, self-serve features (photo input, easy text search) and “endless aisle” capabilities (ability to locate the item online or in another store, reserve and collect self-serve, etc).

Advanced marketers and data scientists may someday be able to predict when a customer is showrooming through cross-touchpoint behavior, dwell-time in front of a product in-store or other factors. It may be possible to deliver targeted content, messages and offers or deploy helpful floor staff to assist or “save the sale.”

Price match yourself

73% of consumers expect a retailer’s online pricing to be the same in-store, and 61% expect online promotions to be the same in-store — yet only 16% of top global retailers have price parity, and 73% offer the same promotions.

Despite what customers want, not all retailers can be consistent all the time. But customers don’t care about the ‘why,’ they care about the ‘what’ if you won’t honor online prices in-store.

A policy to match your own online prices when requested in-store is even more important when you run separate P&L. PO’ing a retail customer by enforcing a higher price in-store may just drive that customer to always use the online channel (or showroom other local shops), and only use your retail location to showroom your own brand.

While it still may not be possible to always have the same prices between local stores and your website, a policy of honoring price match requests when you get them is important.

Foster loyalty

Consumers can be predictably irrational when it comes to loyalty programs. The dangled carrot of reaching a points threshold that pays out in dollar discounts or other perks can be a powerful motivator. If your loyalty rewards are killer, there’s an opportunity cost of buying elsewhere — even at a lower price.

LPO is an acronym for “landing page optimization,” but marketers should also be engaging in another LPO: “loyalty program optimization.” Survey customers and test loyalty offers and rewards, and explore ways to personalize offers. This could be the best defense against both showrooming and your online competition.

Testing should also be conducted on the profitability, not just the popularity, of program incentives.

Offering digital access to loyalty accounts helps assists your faithful customers. If your site isn’t mobile optimized, or it’s a difficult process to sign-in, this slows down convenience-driven showroomers. Consider making points balances prominent upon account or mobile app sign-in, and leverage push notifications or iBeacon messages that remind customers of their point balance when they enter the store.

Price match the competition

Price match the competition so long as you can do so profitably. Dynamic price matching software can be applied to your online or offline channels, and when configured with the right rules can prevent under-pricing while ensuring that self-serve price-checkers can see you price fairly without having to find a store associate and go through your price match process.

Dynamic pricing can also raise your prices when it’s justified to do so. Considering Amazon changes prices every 10 minutes on average, dynamic price solutions help you stay on top of the volatility. Amazon, Walmart and Best Buy all leverage dynamic pricing.

Keep in mind, dynamic pricing may cause problems with customers who spot price changes after they’ve purchased. Consider the impact on customer service resources, branding and loyalty.

Poach from the competition

If 41% of customers who showroom end up buying elsewhere, you may also enjoy the positive end of showrooming behavior. A few ideas on how:

Webrooming happens too

We can’t forget webrooming – when customers “use” your online presence to research purchases they intend to buy in a physical store – from you or a competitor (aka Research Online, Purchase Offline).

In fact, slightly more 78% of US shoppers report webrooming (buying in-store after browsing digitally) vs 72% that showroomed.

When customers prefer to buy offline, it’s typically because they want to save on shipping costs, get it right away, or see or try the product in person. There’s always a chance that the item isn’t in stock locally, and you have another chance…remarketing advertising is one tactic to keep your brand in mind.

If you offer ship-to-store or reserve-and-collect, over-communicating this service is key. Not every customer is aware of all your service policies, and the assurance that a product is in-stock and a trip to the mall won’t be wasted can help convert a ROPO (research online purchase offline) visitor to a customer. It also helps you properly attribute web “assists” to sales.

Showrooming and webrooming are a fact of modern retailing

Technology is making it easier and easier for consumers to showroom and webroom, and this behavior is here to stay. To be competitive, retailers must also embrace technology — from mobile sites and apps that support in-store research and “endless aisle” to optimizing loyalty programs, from dynamic pricing to price matching across channels. Understand where your “leaks” are, and where to best plug them, and anticipate opportunities to capture your competitors’ showroomers.

]]>http://www.getelastic.com/showrooming/feed/0Proximity Marketing: How to Share Local Inventory with Google Searchhttp://www.getelastic.com/proximity-marketing-how-to-share-local-inventory-with-google-search/ http://www.getelastic.com/proximity-marketing-how-to-share-local-inventory-with-google-search/#commentsWed, 05 Nov 2014 08:05:45 +0000http://www.getelastic.com/?p=21918Mobile search isn’t just some thing people do when they’re not near a PC. The smartphone has become as much of an offline shopping tool as a touchpoint for ecommerce. And it’s not just an up-funnel “research” touchpoint. Google’s own consumer research reports 56% of mobile searches “on-the-go” have local intent. 50% of local-mobile product searchers visit a store within 24 hours (vs 34% of desktop and tablet users), and local searches convert 2.5x higher than smartphone searches without local intent.

The study also found 73% of mobile searches lead to some form of “touch” conversion (calling the business or visiting the store), and half of these actions occur within one hour. 18% of local searches converted to an offline sale, compared with 7% of non-local – 250% higher conversion.

But these touches take time – calling stores, visiting websites to check store availability (and that’s if sites show local inventory), using clunky store locators.

The ability to check stock availability pinpointed to the location, along with directions and contact information within search results certainly makes it easier for customers to purchase offline efficiently. So it’s no surprise that Google’s evolving its search products to support this behavior and connect retailers with customers in the local-mobile context. Its Local Inventory Ads program is currently used by the likes of Macy’s, Sephora and REI (contact your Adwords rep to see if you’re eligible).

The ability to target these closer-to-conversion searches is a huge competitive advantage for participating merchants — especially during the holiday season.

Where proximity marketing is headed

Local Inventory Ads are a great first step in serving research-mobile-buy-local shoppers. But I predict this won’t be the last iteration of Google’s search products.

Imagine if a customer could reserve-and-collect, paying for the item directly within the ad unit? Or communicate with the store to set the item aside, alerting sales staff when the customer is entering the store via beacons or Google Nearby? Receive a push notice when the item is ready to pick up or the hold window is about to expire?

What if a store could connect its GPS wayfinding tools to Google, recognizing the customer’s local search upon store entry, and even suggesting cross-sells and upsells?

Cross-touchpoint attribution is a universal challenge, and connecting digital interactions that take place via mobile with in-store purchases is huge.

It will be exciting to see what innovations spring up in the next few years from Google and others, as there’s a lot of room to close the gap between digital and physical search-to-buy experiences.

]]>http://www.getelastic.com/proximity-marketing-how-to-share-local-inventory-with-google-search/feed/0The State of Beacons in Retail 2014 [Infographic]http://www.getelastic.com/beacon-infographic/ http://www.getelastic.com/beacon-infographic/#commentsMon, 29 Sep 2014 08:04:45 +0000http://www.getelastic.com/?p=21833Elastic Path is at Shop.org this week! Come check us out at Booth 739 and ask us about iBeacons, contextual commerce, shopping APIs or any other question about our ecommerce solutions. We’re also giving away a sweet pair of Bose headphones, so please say hi!

Speaking of beacons, what’s the deal with them in retail? This week’s infographic examines the current adoption of beacons in-store, and their future outlook. Hat tip to Beaconstac for putting this together.